Abstract: . . .  Journal of Economics 110, 379-406. Stulz, Rene M., and Herb Johnson, 1985, An analysis of secured debt, Journal of Financial Economics 14, 501-521. Waldman, Michael, 1997, Eliminating the market for secondhand goods: An alter- native explanation for leasing, Journal of Law and Economics 40, 6192. Wolfson, Mark A., 1985, Tax, inventive, and risk-sharing issues in the allocation of property rights: The generalized lease-or-buy problem, Journal of Business 58, 159-171. 37 Page 38 Table 1: Types of Leases: . . .
. . .  Bautista, 1976, Valuation of financial lease contracts, Journal of Finance 31, 799-819. Noldeke, Georg, and Klaus M. Schmidt, 1998, Sequential investments and options to own, RAND Journal of Economics 29, 633-653. Petersen, Mitchell A., 1994, Cash flow variability and firms pension choice: A role for operating leverage, Journal of Financial Economics 36, 361- 383. Petersen, Mitchell A., and Raghuram Rajan, 1997, Trade credit: Theory and evi- dence, Review of Financial Studies 10, 661-691. Rampini, Adriano . . .
. . .  capital. Once they own all their capital, they increase k again until µ 0 reaches R. We now show how the partition of (d,1 - ?(1 - d)) into the three subintervals changes first as the probability of low cash flow, p(L), varies, and then as the ability to repossess, ?, varies. As the probability of the low cash flow, and hence repossession, goes to 1, lim p(L)?1 ¯ d l = lim p(L)?1 ¯ ¯ d l = 1-?(1-d), that is agents never borrow and instead finance all purchases of capital entirely with internal funds, . . .
. . .  on operating leases) relative to total payments for capital services (sum of rental payments, interest rate times total assets, and depreciation) across asset deciles for total capital (solid), buildings and other structures (dashed), and machinery and equipment (dotted). We use the 1992 Census of Manufactures micro data. See Table 3 for a detailed description of the data construction. 1 2 3 4 5 6 7 8 9 10 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 Asset Deciles Fraction Total Rental Payments as Percent . . .
. . .  0.4 0.6 0.8 0 0.2 0.4 Internal Funds Investment 0.2 0.4 0.6 0.8 0 50 100 Internal Funds Leased Capital (%) 0.2 0.4 0.6 0.8 100 110 120 130 140 Internal Funds Return on Internal Funds (%) 0.2 0.4 0.6 0.8 -50 0 50 Internal Funds Explicit and Implicit Debt (%) 0.2 0.4 0.6 0.8 0 50 100 Internal Funds Repossessed Capital (%) Leased Capital Owned Capital Total Investment 46 Page 47 Figure 2: Ratio of Rental Payments to Total Payments for Capital Services Across Asset Deciles Fraction of rental payments . . .
. . .  suppliers with market power may offer trade credit to be able to price discriminate, and Burkart, Ellingsen, and Giannetti (2005) for a recent survey of theories and empirical evidence as well as the papers cited therein. 27 Page 28 repossession and debt capacity incentives for leasing vis-`a-vis the tax incentives. The importance of financing constraints for leasing has implications for several key aspects of corporate finance. First, the fraction of the capital stock which is leased, in particular under . . .
--3000,6,250,3448,111432